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Study says Cuomo's opioid tax would hurt consumers

PhRMA-funded study says tax would add little for treatment programs

Staff report| on
March 7, 2018

Photo: Karlin, Rick

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Study says Cuomo's opioid tax would hurt consumers

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ALBANY — Gov. Andrew Cuomo's proposal to institute a tax on opioids would drive up prices for consumers and insurers and do little to address the drug-addiction crisis, according to a study commissioned by Pharmaceutical Research and Manufacturers of America.

The study released this week concluded that most of the cost of the tax would be passed to state residents who do not consume opioids, with higher insurance premiums being one of the results.

Also, "by increasing the cost of prescription opioids, the proposed tax will encourage (New York) residents suffering from opioid dependence to switch to cheaper illegal opioids, including heroin and fentanyl, with increased rates of accidental overdose," states the report, which was authored by two Union College economics' professors, Lewis Davis and Jia Gao, who were commissioned to do the study.

The opioid-tax proposal was a highlight of Cuomo's executive budget proposal, and was touted as part of his plan to increase revenues more than $300 million by taxing opioids and online purchases, among other measures. Cuomo estimated the opioid tax would provide revenues of about $126 million next year.

The report, however, said the projected revenue gain "may overstate the net fiscal impact of the law as it fails to account for the impact of the proposed tax on state health care spending."

In addition to higher taxes and insurance premiums for state residents, the tax would only increase funding for opioid-addiction treatment for about 2 percent of those afflicted with opioid dependence, the report added.